effective tax rate was approximately 20% for both the three months
ended March 31, 2013 and 2012, and 19% and 20% for the nine
months ended March 31, 2013 and 2012, respectively. Our
effective tax rate was lower than the U.S. federal statutory rate
primarily due to earnings taxed at lower rates in foreign
jurisdictions resulting from producing and distributing our
products and services through our foreign regional operations
centers in Ireland, Singapore, and Puerto Rico, which have lower
income tax rates.
contingencies and other tax liabilities were $9.1 billion and $7.6
billion as of March 31, 2013 and June 30, 2012,
respectively, and are included in other long-term liabilities. This
increase primarily relates to transfer pricing developments in
certain foreign tax jurisdictions. While we settled a portion of
the I.R.S. audit for tax years 2004 to 2006 during the third
quarter of fiscal year 2011, we remain under audit for those years.
In February 2012, the I.R.S. withdrew its 2011 Revenue Agents
Report and reopened the audit phase of the examination. As of
March 31, 2013, the primary unresolved issue relates to
transfer pricing which could have a significant impact on our
financial statements if not resolved favorably. We do not believe
it is reasonably possible that the total amount of unrecognized tax
benefits will significantly increase or decrease within the next 12
months because we do not believe the remaining open issues will be
resolved within the next 12 months. We also continue to be subject
to examination by the I.R.S. for tax years 2007 to 2012.
subject to income tax in many jurisdictions outside the U.S. Our
operations in certain jurisdictions remain subject to examination
for tax years 1996 to 2012, some of which are currently under audit
by local tax authorities. The resolutions of these audits are not
expected to be material to our financial statements.